SHRI RAVULA CHANDRA SEKAR REDDY (contd.): So there is some lacuna in the scheme itself. We request that the Government of India should have a thorough review of the scheme itself. Sir, the other aspect is that...
SHRI V. NARAYANASAMY: It concerns the Finance Ministry as well.
SHRI RAVULA CHANDRA SEKAR REDDY: I agree; it is connected with remunerative price. It includes investment, and investment includes insurance, premium and so on.
SHRI V. NARAYANASAMY: Since it is connected with the Finance Ministry, my request is that while replying to the Bill, the Finance Minister also should be present.
SHRI RAVULA CHANDRA SEKAR REDDY: He can issue a whip to the Minister to be available in the House.
THE VICE-CHAIRMAN (PROF. P.J. KURIEN): You can request the Chief Whip of your party to request the Minister.
SHRI RAVULA CHANDRA SEKAR REDDY: He is the whip of the ruling party. He can direct the Minister.
THE VICE-CHAIRMAN: He himself can issue a whip. But the hon. Minister of Agriculture is here. He can convey this to the Finance Minister.
SHRI V. NARAYANASAMY: Mr. Minister, kindly convey it to the Finance Minister.
SHRI RAVULA CHANDRA SEKAR REDDY: Last year when the MSP was announced, it was fixed at Rs.10 per quintal, which amounts to 10 paise per kg. Is it any enhancement of price? The common masses are thinking that people in Delhi have lost their senses. They are accusing us of neglect. People are in distress, and the farmers are facing difficulties. Many of them have committed suicides. I have the statistics, and I will give those statistics during the discussion on the President's Address. I would like to know this from the Government. While giving low prices to our farmers, what made the Government to import 70 lakh metric ton of wheat and place them in the Southern part of India, at the Tuticorin port? This is also creating problems to our farmers. By paying excess money to other countries, we are importing wheat. We can pass it on to our farmers and thereby we can procure more wheat from the Indian market itself.
Sir, the most important aspect, which we had raised in the last Session also, is that we want a separate Budget for Agriculture and Allied Sectors. When the Railways has got a separate Budget, why is it that we cannot have a separate Budget for Agriculture and Allied Sectors? The reply was that the Railways is a self-generating organisation. That is not correct. Agriculture is the biggest contributor to the national kitty. We can have a separate Budget for Agriculture and Allied Sectors. That can resolve some problems, at least, to the extent of fixation of price and creating legislations exclusively for the farming community.
Sir, there was a strange coincidence today that there were eight Starred Questions on Agriculture itself.
THE VICE-CHAIRMAN (PROF. P.J. KURIEN): Question Hour was not allowed.
SHRI RAVULA CHANDRA SEKAR REDDY: That is a pity. There were eight questions or so in today's list of Starred Questions.
THE VICE-CHAIRMAN: Whatever be the reason, we should ensure that the Question Hour is not disrupted because it is the right of the Members to get information from Ministers.
SHRI RAVULA CHANDRA SEKAR REDDY: Sir, you are aware that the fate of this House is decided by two parties. We are just mute spectators. What can we do? The ruling party and the Opposition are fixing things in the House. We are mute spectators of that.
SHRI V. NARAYANASAMY: You can play your vital role in the peaceful running of the House. Even during the Question Hour, you can play your role.
SHRI RAVULA CHANDRA SEKAR REDDY: My suggestion is to the extent of replies given by the hon. Minister of Agriculture to the Starred Questions that were there in today's list of questions. There were eight Starred Questions on agriculture ranging from fixation of prices, farmers' suicides and many other aspects. It is a strange coincidence, or, perhaps, he must have managed to put all the questions on agriculture on Friday...
THE VICE-CHAIRMAN (PROF. P.J. KURIEN): Nobody can manage that.
SHRI RAVULA CHANDRA SEKAR REDDY: I said it in a lighter vein. I know that. I was the Chief Whip of the Government in the Andhra Pradesh Assembly, and I know it is very difficult to manage things of the Secretariat. Since we intended to send him to Pondicherry, I thought this could help him.
SHRI V. NARAYANASAMY: I also agree. (Continued by 1Y)
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The answer to Question No. 63, in today's Business, was that prices of foodgrains, especially wheat and pulses, had instead increased during the current financial year. And he has given a lot of details. Sir, in the current season, they could say, some increase was there as far as pulses and wheat were concerned, because of the steps taken by the Government. Sir, if they really take all these steps at the ground level, naturally, farmers will get some remunerative prices and, at the same time, interests of the consumers can also be protected.
Coming to farmers' suicides in Vidarbha and Andhra Pradesh and other parts of the country, it is really a pathetic condition in the villages, both in Andhra Pradesh and Maharashtra. The Government should keep this in mind while fixing the prices.
THE VICE-CHAIRMAN (PROF. P.J. KURIEN): Only two States?
SHRI RAVULA CHANDRA SEKAR REDDY: Sir, most of the suicides are in Andhra Pradesh.
THE VICE-CHAIRMAN: Other States are also there.
SHRI RAVULA CHANDRA SEKAR REDDY: Other States are also there. Sir, I have many details. Since the last three years, 18,000 farmers have committed suicide in our country. I have got all the details. But this is not the time to talk about farmers' suicides, since I am touching the issue of remunerative prices only.
While congratulating Shri Narayanasamy for bringing forward such a good Bill, I suggest that the Government should accept it and pass the Bill so that the farmers get some remunerative prices.
With these words, I support the Bill. (Ends)
DR. BARUN MUKHERJEE (WEST BENGAL): Sir, thank you for giving me the opportunity to speak on the Bill. It is a Bill which is very relevant in the present situation. It is a Bill which is very important for farmers as well as agriculture as a whole. So, I must congratulate our hon. colleague, Shri Narayanasamy, for bringing forward the Agricultural Produce (Remunerative Prices) Bill, 2006. We may recall that in reply to a recent question, it was stated that at the behest of the Prime Minister a fact-finding team was constituted by the Planning Commission to study, inter alia, the issue of rural distress and disparities. The reply also mentioned causes for persistence of acute distress amongst farmers. Out of the several causes that were mentioned, one was the high cost of production and low yield and the other was the high cost of seeds and their poor quality. That is the point. It is admitted that the cost of inputs for agriculture are gradually increasing and it is going beyond the reach of the farmers to have good production. It is now a hard fact that farmers have to spend a lot to have their agricultural production. But, unfortunately, they are not getting remunerative prices. Their cost of inputs must be compensated and they must get full support for their livelihood. But it is not being done and that is one of the major reasons for the dismal performance of agriculture in our country. Sir, as it is being reported from all sides, and the Government figures are also now pouring in, it is being suggested that the GDP growth could be around 9.2 per cent; and we are also saying that the growth in the infrastructure area and in the area of industry varies from nine to eleven per cent. But, unfortunately, the growth in the agricultural sector is very, very low; it is as low as 2.7 per cent. (Contd. by 1z/tdb)
DR. BARUN MUKHERJEE (CONTD.): And, there are various reasons for it. I think, this is not the place to discuss it elaborately, but one of the major factors is that the farmers are mostly neglected in our country, at the moment. It is a paradox that agriculture is the most important sector in our national economy, but at the same time, agriculture has become the most neglected sector in our country. And the first victim has become the poor farmer. I believe that is the reason for which the millions of farmers are committing suicides. And even when all these dismal reports are coming, -- although some casual steps are being taken, --but no effective steps have yet been taken to resist this trend of farmers' suicides. It is a very unfortunate matter, but it is going on. So, in this respect, this Bill which pleads for guaranteeing a remunerative price for the farmers is definitely very important. While looking after it, there are three major aspects in which we must look into. One is this. What is the present position regarding our agriculture vis-a-vis the national economy? One thing is, of late we are finding that the corporate houses and the multinational companies, beginning from Reliance to Wal Mart, are now invading the agricultural produce marketing sector, which, so far, for years together, used to be done by these peasants and people living in villages and in the rural areas. It used to be done by them and millions of people were depending on it. But now the corporate sector and MNCs are invading the agriculture produce marketing sector and this is leading us to more disasters. And, associated with it is this. As the hon. Member has already mentioned, the Special Economic Zones are also responsible for this. Of late, the SEZ has been described by an eminent historian that the SEZ is the biggest land-grab movement in the modern India. So, farm lands are being grabbed by this or that way with the help of the so-called Act and rules and with the help of some of the vested interest groups, and ultimately again we see that the farmers stand to suffer, as a result of all these things.
Sir, the third aspect is this. Whatever is the production in agriculture sector, but out of it the principal benefit is being enjoyed by the traders and the middlemen, unfortunately not by farmers who are producing it. That is the greatest tragedy of our modern India, and we must get rid of it; otherwise, we cannot save the farmers, we cannot save agriculture and we cannot save our country as a whole.
(Contd. by 2a-kgg)
DR. BARUN MUKHERJEE (contd.): So, in view of all these things, I believe that it is a very good attempt on the part of our hon. friend to bring in this Bill so that it can ensure remunerative prices for the farmers. It is even stated in answers to questions in Rajya Sabha by Ministers themselves. Let me quote one, "A system of ensuring remunerative and stable prices to farmers is important for increasing agricultural products and productivity in view of fluctuations in prices of agricultural produce." That is admitted at the Government-level, but in practice it is not being done. The present mechanism set up to fix up the minimum support price is rather defective. So, it must be changed. A wider mechanism must be set up and a democratic process must be followed to fix up the minimum support price. That is why it has been elaborately stated in the proposed Bill as to how it should be, in what clauses and in what ways it must be formed.
One thing I should point out; as suggested in the Bill, a Board, to be known as National Agricultural Produce Remunerative Prices Fixation Board, should be set up. It is a good proposal. He has also suggested how to constitute the Board and whatever he has suggested is quite very well, and one thing I should add; in the Board, at least two representatives of the peasants' organisations should be included, because they can feel the pulse of the people at the grassroots-level. So, those who are working along with the peasants, for the betterment of their livelihood, people from the grassroots' level, the representatives of the peasants' organisations should be included in the Board. I suggest this point for your consideration.
Another point has also been mentioned by my hon. friends, and without hurting the sentiments of our friend, Mr. Narayanasamy, I would like to say that it may not be so that we shall point out that the headquarters should be at Pondicherry. It may be at Pondicherry, it may be at Pune, may be at Nagpur, may be at Kolkata, or anywhere. But that is not the major factor. The major factor is that the National Board should function properly in a democratic way taking care of all the views of our people from all corners including the peasants themselves, including the organisations of peasants, including the experts and it should function well in this way so that another factor is taken into account--that while fixing the minimum support price, we must take care of the fluctuations in the situation, that is, fluctuations in the input prices of seeds, fertilizers, cost of labour, all those things. You must take care of these factors so that the remunerative price, in its true sense, should help the farmers who are producing the agricultural products.
With these words, I again congratulate our friend, Mr. Narayanasamy, for bringing in this Bill and I hope that it should be implemented at an early date. Thank you. (Ends)
(Followed by kls/2b)
SHRI SHARAD ANANTRAO JOSHI (MAHARASHTRA): Thank you, Mr. Vice-Chairman, Sir. I stand to welcome the Bill proposed by Mr. Narayanasamy. I wish I could say I stand to support the Bill.
SHRI V. NARAYANASAMY: For the first time, you are supporting me. ...(Interruptions)...
SHRI SHARAD ANANTRAO JOSHI: I supported you on a similar Bill earlier. ...(Interruptions)... We will go on supporting you if you are this outspoken. I am not saying I am supporting you because I know there is not going to be voting on this Bill and that you are going to withdraw the Bill in good time. If you give me a promise that you will not withdraw the Bill, I will declare my support for this Bill.
Sir, the Bill in very brief proposes the creation of NAPRPFB. It is fairly a long name. We had initially for giving the remunerative prices, the Agricultural Prices Commission, which was the great idea of Shri Subramanium on the eve of the Green Revolution. When we found that the APC was not working properly we proposed that the APC should be scrapped in 1984. In 1985, the then hon. Prime Minister, Rajiv Gandhi, said that there would be a reorganisation of the Agricultural Prices Commission and he reconstituted it and called it the Commission for Agricultural Cost and Prices. From APC it has become CACP and now it is proposed it should become NAPRPFB. There is nothing wrong because what is happening is that in the Bill it is proposed that this Board -- hereafter I will call it only Board -- is going to improve the functions not only the CACP but also the Food Corporation of India and the NAFED. Now if you take into account all the syllabus that are included, I think the Bill proposes the name which is relatively shorter. There are a number of points, which are not brought out very clearly. Probably the proposal of the Bill itself is not very clear about the implication of the Bill that he has presented and I would like to make a commentary to bring it out so that the Minister while replying will take into account not only the provisions of the Bill but also the comments that are made here. I think it is particularly necessary because in 1980 when we started the remunerative prices for sugarcane the present Minister for Agriculture opposed it and he said, "If we give the sugarcane remunerative prices, then we will have to sell in the scrap the sugar factories in Maharashtra." It is only after he saw that hundreds of thousands of farmers supporting the agitation and demand, he himself joined the movement and started asking for remunerative prices. One important decision that the proposal of the Bill has made is using the word 'prices'. It is important. Sir, there were three instruments by which the agricultural development can be brought about. Firstly, you must have the infrastructure necessary for the development of land. You must have the banking system, you must have the roads, you must have the irrigation system, you must have the cooperative bodies. All this is necessary if you want to bring about the agricultural development. Then you also want technology. Our first Prime Minister tried to provide infrastructure for the agriculture thinking that provision of infrastructure alone would be sufficient to give rise to agricultural development. Sir, at that time there was a very popular theory among the Leftist economists that farmers produce to the best of the capacity -- once we give the infrastructure, we give them the water and the land, they mindlessly produce the maximum that they can. Later on after the Green Revolution, we found out that technology was an important factor for bringing about development in agriculture and we had the Green Revolution, hybrid seeds and we had the increase in production, which made the country ultimately self-sufficient. (Contd by 2C)
SHRI SHARAD ANANTRAO JOSHI (CONTD.): One thing that was never mentioned in these periods was that the farmer is not a mindless machine. The farmer is a human being and he is also influenced by economic incentives. He is interested in keeping his family, maintaining his wife, maintaining his children and he is not a mechanism that will produce automatically the maximum crop that can be produced in a given situation of technology and infrastructure. It was the greatness of Dr. C. Subramanium, who after taking charge as the Minister of Agriculture, is on record as saying that the first thing that he realised after becoming the Minister of Agriculture under Lal Bahadur Shastri -- under Jawaharlal Nehru, he was the Minister for Industry -- as Agriculture Minister he found that the important difference was that "the whole Indian agriculture was a losing proposition". This is exactly what Dr. Subramamium said. He said that, 'I presume that the farmer will go on producing even if he does not have any incentive'. It is incorrect. It is to Dr. C. Subramanium that we owe the creation of the Agricultural Prices Commission. The word 'prices' has been used and therefore, the first thing that the Bill does is to accept that not only infrastructure and not only technology but incentives, economic incentives are the most important instrument of bringing about the agricultural development. Sir, you will find that the Budget that was recently presented in the name of agriculture and after having quoted Jawaharlal Nehru to say that everything else can wait but agriculture cannot wait and after saying that agriculture must have the top priority and after quoting even a great Tamil poet, all that our present Finance Minister has done is providing money for the infrastructure and technology and not for the incentive. I congratulate the drafters of this Bill because among the three factors, infrastructure, technology and incentive, he has rightly brought out the importance of the prices. All the three are important, no doubt, Sir, but it is like the story that the boys tell each other that if there are three men in a boat and the boat is about to sink, whom would you save? I would say that if in a single boat, were agricultural infrastructure, agricultural technology and agricultural incentives and if the boat were sinking, I would save the agricultural incentives because given the incentive the farmer will improvise infrastructure and technology but if the incentives are not there and if you provide the infrastructure and technology he will not produce to the best of his capacity and that is the reason why in 60 years of independence the agriculture has declined all the time. I congratulate the drafters of the Bill for emphasising the question of price. Secondly, Sir, he has used the word, "remunerative". Now, at present we have not only remunerative price, we have the minimum support price, we have the statutory minimum prices, we have the procurement prices, we have the State administered price, we have the state advised prices and from all this jungle he has taken out a single word which makes it clear that what is important is not the technical difference between the minimum support price and the procurement price but what is important is that agriculture would cease to be a losing proposition and the farmers should be able to gain something more than what they actually spend on. The word, "remunerative prices" is practically an unmentionable word. In one of the questions that was to come for answers today, Question No. 65, the causes for the suicides of farmers are given and you will see in the drafting skills of the bureaucracy and the Ministry, how cleverly they have tried to avoid the word, "remunerative price", navigating through the various techniques. What are the reasons for the suicides of farmers? It is lack of credit availability. He must get the credit. Okay! But the credit will come only to a vocation if it is paying. (Contd. by 2D)
SHRI SHARAD ANANTRAO JOSHI (CONTD.): If you know that agriculture is a losing proposition, no banker will give advance loans to farmers. If it is a remunerative thing, then we will not have to ask the banker to give loans to farmers. The bankers themselves will line up to give loans to farmers. So, rather than asking for creating a network of credit as the hon. Finance Minister has also tried to do, this figure of 175,000, etc., is a wrong figure, because that figure does not mean anything. If agriculture becomes a paying proposition, the bankers will line up to give credit to farmers.
The second point that has been mentioned is lack of irrigation facilities. Okay. But, you have 90 per cent irrigation in Punjab. What is happening there? There is abundant rainfall in Kerala. What is happening there? Punjab farmers are committing suicides. Kerala farmers are committing suicides. So, it is quite clear that suicides are not related to irrigation alone.
The third one is high cost of production and low yield. Okay. The cost of production is high. But, who fixes the cost of production? Who fixes the prices of fertilizer? Who fixes the prices of seeds? Who fixes the irrigation charges? Who fixes the electricity charges, which is the most important charge? If all the charges are fixed by the Government, then to say that the cost of production has gone up does not make any sense, because you are the one who was responsible for raising the cost of production. It does not matter if the cost of production has gone up. If the CACP had taken care to see that the price obtained by farmers was more than the cost of production even to increase cost of production, then the farmers would have no complaint. All other prices are going up; the prices of agriculture inputs would also go up. But, if the CACP takes proper account of increase in prices, then, the cost of production cannot be a factor for suicide of farmers.
Then, they say high cost of seed and poor quality and in adequate marketing support. That is a kind of euphemism, or a kind of ornamentary way of saying that the farmers don't get appropriate price. Who created APMCs? Sir, in the early days of Independence, Rafi Ahmed Kidwai had suggested that we ought to scrap Ration Shops and the Rationing and Procurement System. We insisted on having it. So, we are the creators of marketing system.
Lastly, the ineffective agriculture extension services are again entirely governmental. So, the entire list, really, means that the Government in every way responsible for the suicides of the farmers, because all these six factors are entirely governed by the Government.
Finally, you will see that in the draft, the remunerative prices -- the one word which occurs to you -- very skilfully avoided by the Government that the farmers do not get remunerative price. Credit they don't get. The cost of production is high. It is like a great story of Birbal. Emperor Akbar had a fairy parrot. He had already declared that even if the parrot dies, if somebody comes and tells him that the parrot is dead, he would kill that messenger. Now, one day the parrot died. It is bound to die and every servant was greatly afraid. Therefore, they approached Birbal. Birbal went to emperor and said, 'Sir, your parrot.' He did not say anything else. Akber asked, 'What happened to the parrot?' Birbal replied, 'I don't know. He is lying on his back. His legs are straightened. His eyes are not moving.' And, then, emperor said, 'Why don't you say that he is dead?' He replied, 'How can I say that he is dead. If I say that he is dead, you will cut off my head.' In this way, instead of saying that parrot is dead, the Minister has said that farmers suicides are caused by lack of credit, lack of irrigation, high cost of production, high cost of seeds, inadequate marketing support and ineffective agriculture extension services. So, welcome to the Budget for having clearly brought out the word 'prices' which indicate the importance of incentive and having used the word 'remunerative price' -which is equally important. Sir, the word 'remunerative' has another very important significance which I would like to bring to your notice and to the notice of the House. Even amongst the farmers, there are different schools of thought. There were some schools, there were some organizations which demand a remunerative price which is based on the calculation of cost of production and certain other factors as is proposed in the Bill. There are other organizations which demand that the prices should be index-based exactly the way the salaries of the Government staff are fixed. (CONTD. BY USY "2E")
SHRI SHARAD ANANTRAO JOSHI (CONTD.): Many times you will find, even in the House, Members making speeches and making comparisons between the increasing prices of fertilizers and electricity and the relatively low increase in the prices of agricultural commodity. Now, there is a deliberate choice made -- I hope it is deliberate -- that rather than having an index-based policy, which we presume creation of another body in the Government which will keep watch on the rising prices, the wholesale prices, the retail prices and go on adjusting the agricultural prices according to the wholesale price index, which the authors of the Bill have very wisely avoided because in a country where more than 60 per cent of the population is farmers and only a relative minority is outside agriculture it is not possible to have index-based agricultural prices. It is possible in an advanced country where the proportion of farmers is only 2 or 3 per cent and 97 per cent people can assure index-based prices to 2 or 3 per cent of the farmers. In a country where more than 60 per cent of people are farmers the index-based prices are not possible. I welcome the fact that this option has been deliberately kept out and what we are supporting, you see, is the concept of remunerative prices, based on cost of production.
Sir, there are certain other schemes also which the author of the Bill has obviously rejected. Number one, the scheme that is used in the United States of assuring a certain income per hectare or per acre. Assuring an income, they don't control the prices. They control the income. And, that is where we have the Green Box and the Blue Box, made famous by the WTO Agreement on Agriculture. Now, all these methods of compensating the farmers or encouraging the farmers to produce more have been deliberately kept aside by the author of the Bill, who insists on having remunerative prices. Sir, the definition of remunerative prices, which has been given, needs a very close look. The Agricultural Prices Commission and the CACP have been calculating the prices. I would like to give some examples, even if it means taking some time. I am not going to say that the cost attributed to a particular item was low because there is no way I can prove it in the House. But I will try to show it to the House how erroneous and how malicious were the cost figures that were taken into account by the APC and the CACP. In the year 1977-78, the cost of manure cost was taken to be Rs. 1.27 per quintal. Now, where you get, for example, one quintal of manure at Rs. 1.27? I mean, those who are in agriculture would know how expensive the manure has become. For the same thing in 1980-81, that is, three years later they have taken at the cost of Rs. 1.14 per quintal. So, in 1997-78, the manure could be obtained for Rs. 1.27 per quintal and three years later the price fell to Rs. 1.14 per quintal. What does it show? It shows that there is somebody monkeying along in the APC with the figures of cost. Similarly, the pesticide cost, in 1970-71, was taken as Rs. 42 per quintal, and in 1980-81, that is, ten years later it was taken as just Rs. 14.16. In 1970-71, it was Rs. 42 for the pesticide, and, then, ten years later it became Rs. 14.16. Very surprisingly the cost of pesticides in 1976-77 was taken as just Rs. 1 per hectare for sugarcane. Shouldn't this Chairman of the APC be hanged for having given figures like this? For the irrigation cost, in 1976-77, the cost was taken as Rs. 181.45, which itself is quite...(Interruptions)
(Contd. by 2f -- VP)
THE VICE-CHAIRMAN (PROF. P.J. KURIEN): Mr. Sharad Joshi, what is the point in saying this? Come to the current topics which are relevant today.
SHRI SHARAD ANANTRAO JOSHI: I am bringing the point because if you read the clause in the Bill, he has given a detailed expenditure, and I am going to point out that this method of averaging and the word 'averaging' that he has used is misleading. I never say a word which is unwanted, Mr. Vice-Chairman. When you use the averaging method, this is kind of result that you get. Okay, I will not give any further examples since you are bored with figures.
I will come to the current situation. In the current situation, I will quote the prices that are given in the Agricultural Prices Commission Report this year. Now, what is the guarantee that the mistakes made by the CACP this year will not be made by the Board that the author of this Bill proposes? We have to find out why these mistakes came into the calculation at all. For example, for the casual labour, the cost is taken as Rs. 162 per hectare for the entire crop. The sugarcane crop takes up to 9-11 months. Now, this Rs. 162, at the rate of minimum wages rate is just two days work. In eleven months, does the CACP think that the casual labour is required only for two mandays? Similarly, Sir, for the work done by the domiciliary labour, that is, labour from the family is taken as Rs. 2,100. Our calculation is, according to the study that we made, it should be something like Rs.8,728. Now, this Rs.2100 again at the rate of Rs. 80, we presume, that the whole family mandays work is just about 25-30. This is the kind of unconscionable calculation that has come into the APC. Beyond that, I will pick only some of the things. For example, for pesticides, the cost taken is Rs. 115. The Minister of State is sitting here. Could you tell me what is the pesticide you can spray on one hectare? Forget about pesticides, where will you get a man to spray it for Rs. 115? How did you approve that? Sir, I have a long list with me. I can go on pointing out the kind of mistakes that are made here. Why does it happen? It happens because the Agricultural Prices Commission, as also the Commission for Agricultural Costs and Prices has been following the method of what is called the averaging method. What you do is, take samples and find out figures from about 200 or 2000 farms and put the totals together. It may happen that in one farm there is no cost of irrigation on pesticides at all. These kinds of farms reduce the average and the average figures that are brought out do not refer to any particular farm. It is like the story where you can say that the average depth of the river is only three feet, and make the horses go through the river. But if at any particular point, it is ten feet, the horses will sink. That is what has happened to agricultural farmer. The averaging method is a very unconscionable, unscientific, non-statistical method and for that in most countries, the method that is used is called the Synthetic Modelling Method. Sir, will you permit me to speak on that also?
THE VICE-CHAIRMAN (PROF. P.J. KURIEN): Yes.
SHRI SHARAD ANANTRAO JOSHI: The system is like this. You do not average mindlessly the figures of several farms. You assume a particular farm. You see what is the quality of the land, the location of the land, the rainfall, the water system, technology used, the seed used, the level of management that is used, and work out the cost for that model and assume an output which would be relevant to all these assumptions. If it is a fertile land, then, it will produce more. But for that fertile land, the purchase cost and the rent cost will be much higher. That is the way the Synthetic Modelling Method works. If you work it out in a Synthetic Modelling Method, then, you will come to a figure which makes some sense. I would strongly recommend the Minister to take note of this fact and say that the averaging method, which has been used for so many years must be scrapped altogether. (Continued by PK/2g)
SHRI SHARAD ANANTRAO JOSHI (CONTD.): Sir, there was a number of factors, for example, people have made reference to insurance. I would not like to use the word insurance, because that would mean that you take into account only the cost of payment of premium for the insurance. That is not the real risk factor involved. Then, the Minister of Agriculture in 1982 replied "that the risk factor is not taken into account in calculation of cost of production"; and, even today, the Minister of State might confirm, the risk factor is not included in the cost of production of agriculture produce. What is, actually, the risk factor? On the basis of any particular situation, given the level of management, given the fertility levels, given the assured irrigation etc. what is the crop that you expect, for example, in one State? If you see the actual figures of the crop yield in that area, you will find that, generally, it is only 40 - 50 per cent of the estimated crop. Now, what happens to the remaining half? That is the risk factor. Sometimes, there may be too much rainfall; sometimes, there may not be enough rainfall; sometimes, the pest might come in; and, sometimes, the virus might come in. But you will find that in case of India, Mr. Minister of State, where we have a low capital intensive agriculture, the risk factor is as high as 40-50 per cent. And if you want to have a scientific insurance, based on the mortality tables, as the Finance Minister has called it the Acturial Tables, the premium will not be less than 40 per cent of the crop. How can the farmers pay that 40 per cent rational scientific premium? That has to be included in the cost of production of the CACP or of the Board that is proposed in this Bill. The risk factor in India is much higher than the premiums that are actually collected by the insurance companies. That is the reason why every single insurance scheme has flopped up to now. This is because their mortality tables and acturial tables are unscientific.
Sir, I would like to make certain specific suggestions. In clause 2 (a) of the Bill an attempt has been made to give a fairly longest list of what constitutes agricultural produce. I think it is futile because we have agriculture, we have horticulture and we should not forget the fact that similar support is required even by the fishermen. What is necessary is a much wider definition, and, surprisingly, the whole controversy about remunerative prices was caused by onions in 1980. Onions are not included in the list, and that is the product which has made Government's fall and which makes the Government shiver even today. Sir, the Board is created in Pondicherry, I have no objection. Now you would find it convenient to walk to the office...(Interruptions)..
SHRI V. NARAYANASAMY: Joshiji can also come to that office.
SHRI SHARAD ANANTRAO JOSHI: Okay, but It will be more inconvenient for me. That is all.
Now, I will come to the question of the funds involved. The estimate made is about Rs.500 crores, and Rs.100 crore may also involve as non-recurring expenditure. I think this is a clear, clear under-estimate. You will find that the document which has been submitted by the Ministry of Commerce to the WTO gives figures for the year 1996-97 alone. For a single year, Sir, the loss caused to the farmers because of the artificially depressed Minimum Support Price is Rs.1,30,000 crores. In one year alone! In my report submitted to the Prime Minister on the WTO, I have calculated that for the years 1980-2000, the loss caused to the farmers was of the order of Rs.300,000 crores. That is the kind of figures that are involved. That is why attempt is made to take away the surplus produce from the farmers because that is a big thing; that is not a small thing. (Contd. by 2H/PB)
SHRI SHARAD ANANTRAO JOSHI (CONTD.): It can't be done with the five hundred crores and one hundred crores of rupees that have been estimated. There is much more that is involved, and, therefore, before finishing, Sir, I would like to point out one thing for the author of this Bill. The real motivation why the remunerative prices are not received by the farmers is very simple. Do you mean to say that there has been any difference in the policies of all the parties that have been in power in Delhi -- your party was there, their party was there? There has hardly been any difference in their policies. Now, why is it? The reason is very simple, and I would like to refer here to Dr. Ashok Mitra's book on the subject. Unfortunately, the Leftists are not present here. ...(Interruptions)... But Ashok Mitra is very much in the news. The reason is this. After the Russian Revolution, when they started on the path to socialist industries, the question was, from where the primary capital will come. The Marxists' theory said that all capital comes from the exploitation of the labour and the surplus comes from the exploitation of the labour. Now, in a socialist country, there is no exploitation, so from where do you get the primary capital? And at that time, we had in Russia, which we never had in India, Sir, a great debate between two economists. One was Dr. Preobrazhensky and another was Dr. Bukharin. They debated on it and finally the conclusion was that in a socialist country, if you want to develop the industry, then the primary capital has to be deliberately, forcefully taken away from agriculture. Sir, in simpler words -- forgetting about the economic complexities -- if a farmer sows one seed, he produces about a thousand grains and, according to statistics, you can see that the seed constitutes generally one-tenth of the expenditure. So, if he sows one seed and he has an additional expenditure of ten seeds, his cost of production is eleven grains and he actually produces one thousand grains or more or less. But what happens to this difference between one thousand and eleven? Who takes it away? And, Sir, there lies the key to the whole human history. In the early days, with the use of the bullocks, the man started producing agricultural surplus. Then, rather than using that surplus for diversification and increasing the standards of living of farmers, appeared on the historic scene the plunderer or the robber who started taking away, in a single day from the farmer, what he had produced with the effort of several months or of a whole year. This business became so popular and remunerative that the robbers multiplied, and instead of growing in numbers of one or two, they started growing in numbers of thousands. Then the robbers could not be called robbers; they had to be called His Majesty, the King or His Majesty, the Emperor. Sir, this system of taking away the surplus from agriculture has been the whole history of the world. Later on, the local Kings did that. Then, later on there were invaders. ...(Time-bell). Do you want me to stop?
THE VICE-CHAIRMAN (PROF. P.J. KURIEN): Try to wind up. That is all.
SHRI SHARAD ANANTRAO JOSHI: Its not five still.
THE VICE-CHAIRMAN: Yes; yes. But the hon. Minister has to make a statement.
SHRI SHARAD ANANTRAO JOSHI: So, later on came the invaders, and when the Whites, the British left, ...
THE VICE-CHAIRMAN (PROF. P.J. KURIEN): It is very interesting to listen to the speech.
SHRI SHARAD ANANTRAO JOSHI: Gandhiji said that the British came here in the interest of getting cotton cheap and selling the textile expensively. When the White Britishers left and the Independence came, unfortunately, what happened is that the white Britishers were replaced by the black Britishers and the policies continued absolutely unchanged. We are keeping the prices of agricultural commodities deliberately low in order to keep the wage levels depressed; the industrialists should not have to pay too high wages. We do it to see that the raw material costs are low. And, therefore, keeping the farmer denuded and in poverty is an invariable and inalienable part of the kind of economics that we have been following, particularly, under the name of socialism, from the beginning of Independence. (Contd. by 2j/SKC)
SHRI SHARAD ANANTRAO JOSHI (CONTD.): Sir, I would like to say that there is an easier way of doing the whole thing keeping the purpose in mind. What is a remunerative price? I think we would broadly accept-- even though you have given a list of various elements that have to be taken into account -- that it is the price that covers the cost of production. Now, how do you find out the cost of production? Whether you find it out by the averaging method or by the synthetic modelling method, it does not matter; after all, there is human error. The most unmistakable way of finding out what the cost of production -- I know many people would be offended by this -- is the market. Sir, in a pure, unhindered market, the equilibrium prices equal the cost of production and, therefore, one should not interfere in the agricultural market. The Government has not only fixed the remunerative prices incorrectly, but has also banned the export of agricultural commodities; it has imported wheat from outside at a much higher price; it has accepted milk powder to depress the prices. All that we need to do is to ask the Government to keep its cotton-picking hands off the markets. The price that farmers get may not always be good; sometimes they may be good, sometimes they may be bad, but in the present system of controls, it would be bad every year. Now, we need to change that system.
Now, I would like to make one last point
THE VICE-CHAIRMAN (PROF. P.J. KURIEN): Please conclude.
SHRI SHARAD ANANTRAO JOSHI: Somebody remarked that everybody else is able to fix the price and only the farmer is not able to fix it. But there is a method of doing it; and that is what we are trying to avoid. The Finance Minister has taken away wheat and paddy from the Futures Market.
Now, what is the Futures Market? A farmer produces a thousand grains but that is only at a spot. He knows that three months later better prices would be available, but he cannot take advantage of that because he cannot wait. He knows that there is a better price being offered at a distance of 500 kilometres, but he cannot take it there. Futures Market adds space and time utility to the farmer's utility, that which the farmer produces, and therefore, if the farmers today come to know about the Futures Market, about the correct prices prevailing at a distance of 500 kilometres... (Time-Bell)
Sir, there are still two minutes left.
THE VICE-CHAIRMAN: I would like the Minister to make a statement.
SHRI V. NARAYANASAMY: Even at the Futures Market, farmers are not getting the correct price. There also there is speculation; even there middlemen are thriving. It is not that the farmer is at an advantageous position there.
SHRI SHARAD ANANTRAO JOSHI: Let me explain. I don't agree with you.
THE VICE-CHAIRMAN (PROF. P.J. KURIEN): Mr. Joshi, are you winding up or you need more time.
SHRI SHARAD ANANTRAO JOSHI: Sir, I want some more time.
THE VICE-CHAIRMAN: In that case, let the hon. Minister make a statement and then you may continue with your speech.
SHRI V. NARAYANASAMY: Sir, it is a very interesting point. We could have a discussion on the Futures Market.
THE VICE-CHAIRMAN: The discussion could continue the next day also. Let the hon. Minister make his statement now.
STATEMENT RE. PACKAGE FOR PROMOTION OF
MICRO AND SMALL ENTERPRISES
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THE VICE-CHAIRMAN: Thank you. Mr. Joshi, you may please continue.
THE AGRICULTURAL PRODUCE
(REMUNERATIVE PRICES) BILL, 2006 - CONTD.
SHRI V. NARAYANASAMY: Sir, he could continue in the next session.
THE VICE-CHAIRMAN: But there are still two minutes left; let him continue.
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THE VICE-CHAIRMAN (PROF. P.J. KURIEN): But the discussion has not concluded today. It will continue.
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THE VICE-CHAIRMAN: But he has not finished his speech. Let him continue. If he had finished his speech, I would have allowed you to speak. Please continue, Mr. Joshi.
SHRI SHARAD ANANTRAO JOSHI: I know that the Leftist economists in particular and many people who are not aware of what a Futures Market is, have misconceptions about it. In the old days, the Futures Market was limited only to metals like Gold and Silver; that was essentially a trader-operated market. The producers never figured in that and, therefore, it was called the Vaida Bazar or the Satta Bazar.